If you were starting a broadband carrier from scratch today, would you include traditional home phone service as a part of your bundle? If you are Google, apparently not. They have decided not to include voice service as a part of their Google Fiber service bundle in the Kansas City market.

What is interesting with this decision is that Google has apparently even passed on a pure IP voice play with Google Fiber. “We looked at doing that [VoIP]. The cost of actually delivering telephone services is almost nothing,” Milo Medin, vice president of Google Access Services is quoted as saying by the Kansas City Business Journal. “However, in the United States, there are all of these special rules that apply.”

I assume those ‘special rules’ that Medin is referring to include interconnection, USF/Connect America Fund, and probably some local regulations as well. Google took a look at them and said “no thank you.”

Google made a judgment call, and voice did not make the cut. They’ve determined that their 1 Gbps FTTH network and IPTV is enough to compete with the triple play bundles of Time Warner Cable, SureWest, and AT&T. It will be interesting to see how the market responds.

Google is basically saying, if customers want voice service, they’ll find a way, either through some OTT voice provider that rides their FTTH access network, or through cell service. To them, voice service didn’t create enough incremental revenue to be worth the “hassle.”

This move illustrates an interesting path for traditional voice service. That is, there is a perception by many, that traditional home phone service is becoming an app that customers can choose to utilize or not over their broadband connection. Positioning a voice product for this path is a question that traditional voice service providers need to answer.

Does your voice product have a path towards this potential app future? If so, there may be a lot of Google customers in Kansas City, and beyond, who may be interested in it.

4 comments

Let me try to clarify. What I'm suggesting is this Google decision illustrates a line of thinking that voice service may soon be relegated to that of an application that rides a broadband pipe — not much different than the thousands of other apps that now ride a broadband pipe.

Much of the Telecompetitor community includes traditional voice providers. What I'm trying to suggest is, if you believe in this evolution of voice to an app, traditional voice providers should either be on a path to evolve their own voice product to an app as well, or potentially look at abandoning voice service, concentrate on broadband, and let some other voice app provider fulfill their customer's voice needs.

If these current voice providers are interested in evolving their service to an app, then they have the opportunity to look beyond their incumbent borders, and offer that voice app to virtually anyone, including Kansas City Google Fiber customers.

It's too early to draw firm conclusions, and I'm certainly simplifying the process (both technically and regulatoryly) but this Google Fiber experiment is something to watch and may be a leading indicator as to the future of traditional home phone service.

Another way of saying it, is that voice is just a feature of a larger product (broadband) and no longer the product itself. Google clearly doesn't think the hassle of adding the voice feature as part of its bundle is worth the benefit.

Having said that, Google does include voicemail phone numbers with gmail accounts and with a $49 VoIP adapter one can actually use their number for both in and outbound calls, so in a sense they do have a voice solution.

I think Bernie has an interesting idea for traditional providers to offer their Voice App into Google's ecosystem. The challenge would be differentiation; although the good thing, from a small operator perspective, is that even a small market share percentage could translate into significant numbers relative to their existing business.

Thanks for the further clarification Ken. I think the big picture discussion here is voice service is evolving …significantly so. As with any evolution, there are challenges and opportunities. I would argue that traditional phone companies, if they want to stay in the voice biz, need to start thinking outside the box and looking for ways to leverage and monetize their network assets beyond their incumbent territory.

The move to IP voice creates some interesting opportunities to do so. Ken rightly points out, it won't be easy, and differentiation will be a challenge in a broader ecosystem, Google or otherwise. But it could be a lot of fun. Who's up to the challenge?